good morning, everybody. welcome to "squawk box." i'm becky quick along with joe kernen and andrew ross sorkin. advertise the season for retail. the national retail federation says a record 247 million americans visited stores and websites over the four day holiday weekend. that's up 9.2% from a year ago. shoppers spent more, too. average shopper handed over $423. that's up from just $398 last year. courtney reagan's been tracking the numbers and she will join us with the details. also veteran retail analyst dana telsey will join us with her take. and coming up at 6:40, com score gives us a forecast for cyber monday sales. we of course continue to watch the fiscal cliff count down.

lawmakers have been trying to convince the naub they are willing to compromise. they return to capitol hill today. >> everything should be on the table. >> bring entitlement reform into the conversation. >> a group of corporate executives are calling on congress to rise above partisan politics to try to find some sort of a solution. we have a lot to talk about with gleg brown and we'll start that in just a moment, but first over to andrew. finance ministers are trying to unfreeze the second bailout package for greece, but first they must agree on how to cut massive debt to a more sustainable level. we'll head to london for details on that. and playing down a deal talk, tom joyce saying his country's currently if talks with at least two firms on a possible sale of its largest business unit.

but would only pursue a deal if it created value to shareholders and clients. and mexico's anti-corruption body says it has found no irregularities in its probe of permits given to walmart. two audits still under way. you are remember the "new york times" reported walmart wribed local officials so it could open stores more rapidly. mr. kernen, welcome back. >> thanks. was i out? >> you were. >> friday doesn't count. >> happy thanksgiving. how about that. >> thank you. yeah, friday, nothing -- the mar cut was up, thin trading, but down today. even though these guys are meeting again. in a sign of the slow pace, senior administration official said president obama and congressional leaders are not expected to reconvene this week.

this is so the staff of both sides can continue to organize and work through the differences. and what is not a surprise at all, mr. obama instead will probably hit the road this week to give speeches. >> xwitner is supposed to be coming up with the details. >> aides said mr. obama will hit the road to mobilize public support. just like the last, same speeches over and over. >> you saw warren buffett this morning. >> some interesting points. he had an alternative minimum tax he had been talking about for the really wealthy. >> 30% or something. >> anybody from 1 to $10 million. also talked a little bit about raising the -- >> same thing he's been saying all along.

>> he added that when it comes to who should be paying the higher taxes, he wants the threshold to be $500,000. >> and you see steven rattner on on talking about capital gains, deductions and things you've talked about a lot. >> time for the global markets report. ross westgate totally still confuse aed about thanksgiving and pilgrims. what was all the hoopla about? you celebrate boxing or something, don't you? like we lost a great boxer. is that what you celebrate? what is boxing day? >> boxing day, the day of a christmas. >> you wrap all your presents in boxes? >> i think it's something to do with all the presents. i'm not quite sure. >> yeah, put them in boxes.

>> maybe. >> so you ignored our thanksgiving. but feeling okay again? >> yeah. you know, it's okay. it's all right. it's gone. now we can concentrate on the run up to christmas. and how much shopping we have to do. >> a lot of red behind you. >> we had a good week last week. while you were celebrating thanksgiving, european stocks did exceedingly well. in fact take a look at the ex-have a dax, up 5%. ftse up nearly 4% in the last week on top of pretty good gains for the u.s. markets as you know between 3% and 4%, as well. so no surprise perhaps today that we're a little bit weaker on the back of those gains. 8:2 just about decliners outpacing advancers. this is how it translates. ftse 100 down half a percent. xetra dax up a quarter. ibex down about half of 1%. a number of things going on in politics as ever. we had regional elections in spain. yields you can see slightly higher, but still well below 6%.

now, these regional elections fairly important because we know catalonia has been pushing on on independence. now, it looks less likely we'll get that referendum, but not because people in catalonia are any less eager on a separatist movement. just that they didn't vote for the main guy who is proposing it. they voted for competitor party which is makes it slightly harder in the short term for them possibly to get a referendum going. so eases the pressure in the short term but means there is still a longer term problem there. catalonia is one of those regions that still has very large deficits, as well. so the politics in spain slightly skewed as they will be, but not so much pressure on rajoy at the moment. unlikely to ask for assistance in the short term. we also have another euro group meeting take, back in brussels, yes, i know, we seem to have one every week. they may come up with a long term financing deal for greece.

finally talking about debt forgiveness in greece which is what we all know has got to happen. whether it can happen before the german elections in the fall next year is a mute point. anyway, that's where we stand. fairly down beat for equities and yields a little bit mixed. back to you. >> all right. thank you very much. let's get back to the fiscal cliff. we've been talking about the issues of taxes. as we mentioned, warren buffett calling for a minimum tax for the wealthy. he starts with suppose that an investor you admire and trust comes to you with an investment idea. this is a good one, he says, i'm in it and i think you should be, too. would your reply possibility be it all depends on what my tax rate will be on the gain you're saying we're going to make. ifs taxes are too high, i'd rather leave the money in my savings account earning a quarter of 1%. only a grover norquist imagination does such a response exist. foos what he thinks should be done in washington, he says he

supports president obama's proposal to eliminate the bush tax cuts for high income taxpayers. however, he says he prefers a cut off points somewhere above $250,000, maybe 500 thud or so. additionally, he says we need congress right new to enact a minimum tax on high incomes. buffett is suggests 20% between $1 million and $10 million and 30% on amounts above that and that's something he had laid out before. the real definition of the buffett rule. >> i always thought he was uncomfortable about the way the buffett rule was constructed and felt uncomfortable about saying something about it. because remember, he never really spoke openly about it, he would intimate that 250 might not be his number. >> the buffett rule is 30%. >> but then he's also talking about the 500. >> but that's not the buffett rule. but if you're doing tax reform, then you're not going up anyway. >> i think the main point he's saying is forget about the larger reforms p.

maybe we'll get withere, maybe won't, but put that in place now. >> i don't think it's fair to say he's not in favor of tax reform. >> he's saying hopefully we get there, but enact this now and deal with everything else later. i can pick it out if we need to. >> he's not in the house. regardless of what he decides, it's meaningless. >> let's bring in our guest host, greg brown, chairman and ceo of motorola solutions and member of fix the debt.org. you have said this is something we shouldn't do, go over the cliff, but you also think we'll get it resolved. what makes you so optimistic? >> i think both parties are going through the normal political calculus and game of

chicken, if you will. i've spent a lot of time with colleagues on both sides of the aisle. i think there is universal recognition we have to resolve it. there's sonl so many levers you can pull and buttons you can push. so i think there's a rick nation tax revenues need to be higher. there's recognition that across the board sequester cuts is a mistake. so i think we'll get it done. i don't know what to make of no meetings this week, but i don't gets a concerned about that. i think there will political posturing on both sides. >> it seems there is a growing block, something pointed out in morning money this morning about how there is a growing liberal block that would just as soon see us go over the cliff if it means they're not going to get the revenue increases they're looking for and they're looking at higher marginal tax rates. not some higher revenue number. it they're not getting that, not willing to sign off on that, if it means you'll be making these

cuts to some of the entitlement program, they would just as soon go over the cliff. >> i hear you. and i think that it's kind of popular to point out the sharp differences. i think there's more and more common ground. even the president talks about willingness to do entitlement reform. he threw out the 1.6 trillion. if you take that as a data point and reference where he was with boehner in august of last year, he was at 800 billion, are those roughly the goal posts for a tax resolution and remediation somewhere between the two? my view probably. >> but the whole question is whether they can ever get to doing it with loophole cutting or whether they do it with -- it's all about the marginal rate stuff. he'll talk about marginal rates. once again we'll hear about that. and i understand you can continue to put the house in sort of the obstructionist corner and call them tea party

and they're at 8% now. you might be able to drive the approval rating down to 1%. but if we do go over the cliff, no one's going to remember the names of any of these house guys. they'll remember barack obama. i don't understand how -- maybe this is just where everyone will be shocked and all of a sudden they'll meet somewhere oond he'll say fine, as long as you raise revenues. but i don't see it that way. >> where are you on the numbers some. >> i think 250,000 is too low. i think 500,000 or a million is more in order. the administration's consistently talked about the ultra wealthy and the millionaires. i think the notion me personally of millionaires paying more is fine. i think if it's done in the tone

of constructive collaboration and everybody picks up an ore and rose for rez lose i'm fine. >> and where would you be on capital gains and dividends? >> that's a little bit stickier, but to your earlier point, around your buffett example, can capital gains go up a little bit and dividends? probably. do i think it has a material impact on capital deployment and investment, probably not. i think, joe, your point on the marginal tax rate, i think that is the key issue on the tax side. >> buffett talks about no one makes decisions based on tax rate. i guarantee you some of what we're seeing in the market right now has to do with capital gains rates. >> that's also part of the problem with the -- >> probably all of us are considering at some point. so you'll see some near term selling based on -- >> but that is near term stuff based on the idea that taxes are changing and that we've never figured out exactly where they'll be. >> i don't know whether 28%

versus 15% or 20% causes capital to become less available. >> what rattner didn't pick up, though, was the idea that taxes are going up on capital gains anyway because of the obamacare. so i don't know if he sees 28% including the 3.8% or -- >> but at the end of the day, it has to be fiscal cliff resolution and absolutely comprehensive tax reform sometime in 2013, lowering the corporate rate, broadening the base. >> how do you force tax reform when the fiscal cliff was supposed to be the gun at everybody's head? if we say never mind, how do you actually force it in the new year? >> i think that first of all in terms of the fiscal cliff, it's got to be a framework deal. you're not going to get legislation in a lame duck. so calculate what the tax revenue number needs to be.

take the president's and you get a deal. if there's a tram work $4 trillion deal over ten year, legislation can be codified and enacted after the fact that solidifies that, then you've bridged comprehensive tax reform. i think the keys are revenue neutrality, broadening the base, eliminating the loopholes, the devil's in the details. but i think there's also recognition that corporate comprehensive tax reform needs to occur. both sides of the aisle wanted to wait until the election is over. it's over. we have to tackle is. >> but now we're waiting again until we get closer to the next election. >> no, we can't wait. becky, you know we have the highest corporate tax rate in the world. you can only wait so long. consumers are borrowing again. i think they're pretty healthy. corporations are very healthy

from a balance sheet perspective. the first thing in the conversations with senior government officials is the fiscal cliff. so we have a tendency to forget the global implications and that many people look for the u.s. to get its house in order, not only from a domestic economic policy standpoint, but from a foreign affairs standpoint. >> they say it would be better to go over it than kick the can. now they say with have to do infrastructure, investment, but their main thesis was we got to do these pro-growth tax reforms, take these steps to do these

things. >> i'm not sure they're bringing rates down -- >> they're talking about tax reforms. >> big tax reform. >> don't just -- >> we need big tax reform. coming up, rining up holiday. dana telsey in the only time you'll see her on tv this christmas season, probably not true. she spent all weekend canvassing stores. she'll bring us her take on the americans consumer. but first the average age of this band is older than the

supreme court. the rolling stones mashing their 50th anniversary with a concert this london last night. the band performed in front of an audience of 20,000 fans. hits including i want to be your m man. the stones will play one more gig in london on thursday before heading to the u.s. to play brooklyn and newark next month. i always wait until the last minute. can i still ship a gift in time for christmas? yeah, sure you can. great.

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we have the results from the first official weekend of holiday shopping. court a courtney this, was a big week end. >> what fiscal cliff? i know we're talking about it, but according to the national retail federation, 139 million consumers shopped this weekend. 40% of it was on dllineonline. and today's cyber deals are expected to continue to drive online sales. retailers have held back special products and prices to gain wallet share in today's shopping events and does expect the momentum to continue. online 18% higher on thanksgiving. black friday saw more than a billion dollars in online sales, up 26% from last year.

and marks the heaviest spend day online so far in 2012. 44% of retailers will offer free shipping up from just 12% last year as that add-on moves from being an incentive to being a requirement. and while it's back to work for many, 4 #% said they will shop in the morning. adobe has thes most bullish forecast projecting the biggest 2k5 day of the season for web buying. bringing in 4550% in more sales. com score says amazon, walmart, best buy, target and aem rounpp rounded out to the five on friday. mobile shopping expected to see expo thnen mobile shopping expected to see expo thnetial growth.

and they have the cyber monday ads all over the place. hard to get on the web and not see something like this. >> okay. thank you, courtney. and joining us for talk more, dana telsey. great to see you again. >> thank you. good morning. >> so you said to us on friday you could really call the season until december 17th. >> exactly. >> but i'm going to force to you try to do it right now. give us a couple names that you think are the winners and a couple losers. >> basically what we saw, the winners definitely being macy's, express giving out great deals and a lot of traffic. a vera bradley saw a lot of traffic. a lot of the deals extended throughout the five days. and, yes, today is cyber monday.

so that's important, too. >> but let's talk about some of the losers. give us some of the surprise losers. >> i think some of the ones where it was slow, luxury brands don't play in black friday weekend. they play closer to december 25th. women's retailers are for self purchase. >> dare i raise jc pen any again. >> we saw it crowded in the beginning of the morning hours. certainly the 6:00 a.m. to around 9:00, but it didn't continue throughout the day. >> the entire store empty except for the 12% area and then you couldn't move. is that how it works now? >> small electrics is where they're giving the deal. so house wears areas.

>> did anyone get hurt trying to get at those buttons they were giving out? >> i didn't see anyone getting hurt. >> when you think about this season and really trying to project out, if you go back and we talked about it a little bit on friday, 2008, the number on monday, like the number we're talking about today was huge. and yet if you looked a month and a half later, two months later, you would have decided it was a horrible holiday season. how do you handicap where we are right now? >> i think where we are right now, we saw traffic overall just a little bit lighter, conversion higher. i think there's a long way to go. but certainly i think the season, it's going to be a battle almost every single day as you keep getting through to those ten days before the 250th. i think we go into a lull period now before you get the big sales coming again. >> so we'll hear a little more depressing news before it gets

better. >> exactly. >> okay. dana, thank you for joining us. when we come back, we'll med to the futures pits and find out this stories are most likely to drive today's action. plus a youtube milestone. this weekend, gangnam style became the most watched. this video has more than 800 million views. the video edging past justin bieber's video for his song baby. [ male announcer ] this december, remember --

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welcome back to "squawk box." holiday music is okay now once you're through thanksgiving. just get ready. it will be every day with us and everywhere you go. as you get older, the years start passing very quickly, it seems like you're basically in a permanent christmas music mode. it is. so you don't really get nostalgic for it. it's just still there. never really goes away. so you never really say, god, i'm not sick of this. i'm joe kernen. between days after thanksgiving,

i wish they would stop with the christmas music. >> i love it. >> becky quick is here, andrew ross sorkin. and markets rallied on friday on hopes it will be a very merry holiday season for retailers. but there are issues on the fiscal cliff looming. scott bower, trading market advantage. normally they posture, but they finally do the right thing. but both sides have certain elements that would like to go over the fiscal cliff just to get something done that we can't seem to agree on. where are you now? s&p said 15%. other people have said 30%. do you think we get a resolution? >> i think that we get some sort of extension. we'll get them to say we're on

the same path, we're making progress, but we need another six months, so we're going to extend everything that's in place another six months, but we're working together. i mean, it's really odd, joe. you think about it, and i will tell you that the feeling on the floor and the feeling in my community is that there is all these back room deals already. and just don't know what to believe. and you have to believe, though, that they do have something really worked out because look at what the economy -- look at where consumer sentiment is over the last couple months. i don't think they can really, you know, run the risk of that falling back. we made so much improvement over the last couple months. at least macroeconomicly, they can't run the risk of this thing going over. >> what does it mean for the stock market and how many different things are affecting it right now? i figure not knowing where tax policy is next year, some people

know it will be hire, so they're probably just going to sell into december 31st. and then you've got continuing problems in europe, as well, morgan stanley has a report out about possible recession in 2013. what are the factors that influence the market at 13,000 and do you think it's a good time to ad money or take money out? >> short term, i think the feeling is that things are going to work out. so we'll be in this range here of in the s&ps 1390, 1420. i think if we break 1390, we get down to that next 1360 level will, again, there is so much money on the sidelines waiting to do something, waiting to get in, that i think that the big players that are on the sidelines already have it factored this about a dividend increase at some point and the tat tax rate increase and with both hands they're waiting to get into the market. so i think there's major inherent support down below the

market, maybe another 3%, 4% below where we are right now. and that's almost like a built-in floor. >> all right. scott, i don't know. a lot of things that affect the market, including valuation and headwinds, tail winds, everything else. >> 421 points for the dow. >> a lot on friday. this one was around really. you guys were here. >> we were here. >> i know you were. >> it was a big day. >> it was not a svetter? >> i was wearing a v-neck sweater. >> company issued which i didn't know that could you do that. what all does the company buy for you now at this point? >> i have a lot of things in my contract. >> underwear. >> >> it's very complicated. we shouldn't go there. >> personal hygiene products? >> you really -- >> you got no answer. >> socks. >> socks? not yet.

all right. but the svetter, weren't you surprised we buy his -- what about that vest you had? >> that was not company issued. >> they didn't pay for that suit? >> no it was my own suit. who owns that tie? >> they gave me this. that vest, people brought that vest up to me over the weekend. i'm not kidding. with all the pockets. >> who? >> i'm not going to say here, but it was brown and it had -- >> ashen, my friend. >> would you wear a vest with lapels? >> i got see to make a comments, but it sounds a little sketchy. >> sorkin sweater of the month. perfect. very nice. >> let's talk about squawk sports news. we'll start things off with sunday night football. the giants beating the packers 38-10. eli manning tossed three touchdown passes and became the giants all-time leader with 200 career td passes. in college sports news, notre

dame now tops the bcs rankings. decisive win. number two right now is alabama. and speaking of college team, we have a special guest with us in studio this morning. rutgers athletic director tim pernetti will be joining us to talk about his school's move to the big ten. >> i watch that had gaed that g thoit we were going to have a respite from -- will every monday, we got to hear about rutgers. finally i'll get a break. so you bring in the athletic director to talk about -- >> the move to the big ten, which is a huge -- >> did you see his interview?

during the game, he was so for like ten minutes. but i have all those same questions to ask him. you realize that the twri state area didn't really have a big ten team. so for the big ten, it opens up the biggest tv market -- >> as long as they're good. >> that's the problem. and people tell us probably that they're big ten ready right now. >> they're not big ten ready. >> well, with pittsburgh, it didn't look like you were -- >> we'll see thursday. >> i don't know what happened to louisville. how did they get beat? >> i was surprised. >> i was, too. >> but greg is on the board of governors, he was there and knows about all the things happening behind the screenes. >> you've gone a listening way overcomi ov long way overcoming -- so it can be done. >> rut dwrers isgers is a great

school. >> almost ivy league. >> you don't want them to be brainwashed. >> i don't want them to become socialists. i don't. orlt r oral roberts? i don't know. i haven't decided. >> if you have comments or comments, shoot them our way. if you think productivity is a little weak than normal at the office this morning, you're probably right. our next guest whether know why. com score saying that americans are expected to spend $1.5 billion shopping online today. probably from their desk. it's a new day.

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still to come, a special squawk sports moment. tim pernetti will be joining us in studio to talk about his school's move to the big ten and he has a surprise fwift for joe. ♪

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welcome back. it has been quite a week for rutgers university. they officially joined the big ten college while its football team zeros in on an orange bowl position. joining us, athletic director tim pernetti. >> is ththis is the fight song, the alma mater. >> all fight songs sound alike, don't they? >> a little bit. >> tim, thank you for coming in. is this huge. what this means for rutgers, not just about what it means for the football team, but really the money that the school will be bringing in as a result. >> thanks for having me. it's terrific for rutgers and it's a university wide thing. when you look at conference

expansion, i think everybody's impression is that it's all about football or it's all about athletics. but i got to be honest with you, college presidents make these decisions. and the big ten presidents are the ones that vote yes or no, so institutional profile is really the lead dog in these things. and we have a tremendous academic profile at rutgers. the timing is get. president had a heck of a week. so for rutgers it's a great fit. faculty is excited, board is excited, athletics are excited. and if me having to run the business every single day, it brings a tremendous amount of resources to the table that you just don't realize in any other conference in college sports right now. so it's an unstable time. schools are leaving conferences all over the place, but for us, what we have at rutgers, the assets, the new york market, all those things gave us the ability to be positioned for stability forever. >> for the big ten, too.

i think of it more for the big ten, that they get the tri-state area. that was the point being made as i was watching your excellent interview on-of they gave you like ten minutes. >> they did. i was shocked. >> but every question she asked, i was like, oh, my god, what hfr-and then i was actually interested. >> sold. >> i don't think anybody in the tri-state area cares about watching wisconsin, but if rutgers is in it, it's good for the big ten and rutgers. >> what commissioner toddelaney shared, penn state has been in the league for a long time and now it's a bridge into the east. if you look at the map, you see the triangle taking shape. that coupled with the fact that the new york market has been unclaimed in college sports. since rutgers has been doing

football, we've overdelivered the market. >> was it not good to see them win that last game and have a pretty good year and that coach has got to be up for -- because i hope that team -- it's sad what happened to that football program, but they had a better season than anyone thought. >> it's incredibly sad what happened, but i think if you look at the kids in that program and what coach o'brien did, they did as good a job as a head football coach that anybody in the country good because it couldn't have been a more difficult situation to handle. >> how much money is this deal worth to you? >> i think like anything, our fans are like this is great, we'll get all the money right away. but what happens is you integrate over a period of time. we can't share equally in value we had no part this creating. so what we'll do is we'll enter the conference in a couple

years, as we grow financially, we'll start at better than where we are slightly, growing to full membership over a five or six year period. but the big ten distributed $25 million per school last year in revenue we in our current conference situation are more like at $3 million to $5 million per year so it's a pretty significant swing and they have their own tv network which is throwing hundreds of millions of dollars off coupled with their espn deal. >> you should be able to attract better athletes. >> it was funny i was at the press conference at rutgers and i invited all of the coaches and walked in and looked up and never seen bigger smiles than i did in my life, they're all thinking recruiting, recruiting, and that's the lifeblood to any program and in football there's top kids in new jersey every year and we can't fight the argument of i love rutgers but i want to play in the big ten. guess what? that's over. >> too late to recruit for that

pittsburgh game. >> the time the game is over we're on to the next one. >> the next one is a big one thursday night. >> in the midst of all the medical school, big ten, we play louisville thursday night at 7:30 for our first big east championship and we've never had a conference championship game on our campus. >> every single report i saw on notre dame over the weekend, they all started with love 'em or hate 'em. >> any champion. >> i guess. but the sec, is this not the perfect foil to try to go in and break their dominance on the national championship? this is so great to have them there as the, you know, the david and goliath. >> for college football it's the ultimate movie stricript.

>> alabama or georgia? >> the way you look at it as a fan everybody wants to see alabama but for notre dame, they're a great point because notre dame when they decided they were going to join the acc which they did in september was the linchpin. at least we know what they're going to do. >> if it's alabama, the score might be 5-3 or something, right? >> it might be. you really worry about a lot of details that don't matter, do you? >> i do. i'm in business. >> you're entertained by the game. what's the matter with the score? maybe 7-3? >> i have a business question, because ultimately at some level this is all about business and all about money, there's always been a question whether athletes should be paid, whether the kids should get money for what they're doing in terms of bringing the fans, the audience and the money to school. how do you feel about that? >> it's a great question and i've had the same opinion, you're creating the value,

selling a jersey while he's competing and after he's competing but the focus is on the mission. pay them or don't pay them. why not as you generate revenue put that money in escrow and have sort of what the elive constitue equivalent of a post graduate scholarship because if we send three kids to the year to the nfl or one to the nba that's a lot. have something that sits thereupon graduation for every kid i don't know how much it is, $5,000, $10,000, $25,000, gives them the ability to get started in their life but you're not dishing out special money, it's graduate and here is what is here for you to get you started. >> i like that debate. do you feel that debate will happen? >> it's not, for me i think because i was a student athlete there and after my first practice at rutgers at football,

i guess the nfl is off the table because of what i played against but i was focused on my education and i think a lot of kids are because the views are publicly the kids are getting ready for the pros. it's not true. kids are more focused on education. you're an injury away, not quite as good. i've tried to talk about that as much as possible because i think it's somewhere in the middle that gives everybody the ability to share in the value but focuses on the mission, our goal to educate and graduate kids and set them up for success. >> take some of the pressure off some of the ohio state head problems. that's sad this year to go in undefeated and not even be in the -- >> it is, it comes back to the governance. the ncaa, i'm not being overly critical but the rule book needs to be totally revamped. lot of regulations were written at a time when a lot of special

circumstances weren't concerned. i tried to set up a fund to help a player that was seriously injured, everything has to be overhauled for college sports to be governed in the right way. >> joe wore his rutgers red tie today, very kind of him and i see you brought something along, too. >> what i would really like to see him get this on because it takes four players to get a jersey on on game day. i want a picture of him trying to get one on. >> did you get sorkin? >> sorkin is in the middle so he gets a number two. and of course, rutgers love becky quick always number one with us on this show, you get a number one. >> that is great. >> we hope you display those

proudly. thursday night, may get up at 3:00 in the morning, but love to have you at the game. >> i'm worried about it. >> come sit next to me during the game and we'll worry about it. >> i might actually stay up late. >> is it harvard on the raritan? >> i've never heard of that. >> did you make that up? >> it's good. >> you told me that was said all the time. that's the first time -- now it's a trademark. >> greg brown said it, it will stick. >> thank you for coming in. a nation on a cliff, steve rattner, another member of the fix the debt committee. obligations, but obligations. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core,

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holiday central. >> plenty of shopping days left. >> the american consumer shopping and dropping more than a few dollars this weekend. we'll ring up the state of retail. rise above. warren buffett's calling for a minimum tax on the rich, what are some of the nation's top corporate leaders make of the idea? the a disruptor you have to see to believe, pushing the boundaries of man and machine as the second hour of "squawk box" begins right now. >> good morning, everyone. welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we've been watching the futures and the market giving back gains

from last week. the dow futures down by about 64 points below fair value, s&p futures off by six points and in our morning headlines the national retail federation says a record 247 million shoppers visited stores and websites over the four-day holiday weekend up 9.2% from a year ago. americans spent more money there, too. the average handed over $423 during the entire weekend, up to $398 last year. few interesting analyst calls today, facebook upgraded to outperform from market perform at bernstein. the target increasing to $33 from $23 and yahoo! added to the list by goldman sachs and research in motion, sector outperformer from second underperformer at cibc world markets. we're trying to come one a clear solution to solving the debt crisis. joining us as our guest host,

motorola solutions ceo greg brown who has been with us this morning so far and new to the table, steve rattner, issues of the fiscal cliff dominating the sunday talk shows. here's senator lindsey graham. >> i agree with grover, we should raise but he's wrong where you can't cap deductions and buy down debt. i want to buy down debt and i will violate the pledge, long story short for the good of the country only if democrat also do entitlement reform. >> you listen to what he has to say. steve you had an op-ed over the weekend. we talked about warren buffett's op-ed, the 30% for everybody over $1 million. you talked about raising the rate 28% is your personal number if you take it.

you say from everything i'm reading it would not have a huge impact and the conversation we have constantly is look what's happening in the stock market. people are selling stock in advance what have they think may be exactly what you're talking about. >> you have to separate two things, people selling things because of the uncertainty in washington, different from the question if tax rates were higher, people would own stocks for less longer. i was reassured warren buffett who knows more than i do about investing said the same thing today that his behavior he's been operating for 60 years across every tax regime you can imagine taken doesn't change his behavior. he buys stocks he likes, holds them for as long as he feels like holding them and sells them. >> why 28%? >> that was the rate before clinton lowered it to 20%, the rate that came out of the 1986 tax reform pack annual.

i don't know if 35% or 39.6 is the right rate but it's a reasonable rate and gets the tax rate on capital gains closer. >> how about dividends, steve? do you, you know how a lot of times we look at whether market's cheap or expensive based on the dividend for years based on what the yield of the s&p is and if do you it on an aftertax yield, if dividends were to go to 40% say or higher, would the market then be revalued? would it have to be revalued at a lower level based on what the aftertax cash flow is? >> dividends were taxed at 40% until the bush tax cuts and the stock market is back. >> there's a lot of different things going on. apples to apples, do you think that the market could be valued more cheaply if dividends aftertax were lower, much lower? >> on a theoretical basis yeah if you're going to get a lower aftertax return into one asset

you might into another asset, bonds. >> what do you think in. >> i think there will be a nominal revaluation but at the end of the day, in the main -- >> you can handle it. as long as it's not 50% on dividends. >> right. >> remember we're talking about reforming the corporate tax code to make u.s. companies more competitive globally. i'm in favor of that. that comes down to companies paying less in corporate tax. if they're going to pay less who are the beneficiaries, shareholders. the shareholders should pay a little more to make up for the loss in revenue. >> are you an advocate of the u.s. moving to a territorial system so the administration seems to be supportive of a lower rate, seems to be supportive of broadening the base. there seems to be reticence or reluctance to adopt a territorial system when everybody else has. >> remember that corporate tax rates is a share of total federal tax collections going down, down, down, down, down, because corporations have become better in managing their profits in a way that minimizes their

tax liability. thes reticence you hear is tha we think corporations should pay their fair share. we need companies to compete globally. i do support moving to a territorial tax system if it's coupled with the idea that the beneficiaries are paying taxes some other way. >> corporations pass along taxes to their consumers anyway. to the customers as well, right, so then you're sort of saying they're going to get stuck with it. shareholders would get stuck with part of it and it also gets passed along with, that seems self-defeating, too. >> we're talking about lowering corporate taxes on the shareholders. on the beneficiaries of those higher. >> you worked in the white house, steve. you know the president. >> i do. >> you know the way he thinks and frankly many of his cabinet members and those quhis pwhispe

his ear thing. he'll barnstorm the country and talk about the 39.6%, talking about marginal rates. where is the room to the extent you believe there's room, to compromise, with a house that doesn't want to talk about marginal rates at all? where is the white house able to compromise? >> i've been doing deals for many years, greg has, there's always compromise. could you put the buffett rule in to raise a bit of money over here? the beauty of this situation, it's difficult, but the beauty of it is, it's not an either/or, there's no black and white that has to exist. there's an infinite number of possibilities. >> we can talk about this philosophic philosophically. president obama the man that you know how is he thinking about this in. >> i don't know but i believe he's thinking about this as the most important thing that will happen in his second term. if he wants to have a second

term legacy unlike many other second term presidents this is the issue. >> fiscal cliff or the larger issue? >> the whole thing wrapped together. >> is he willing to go over the cliff in. >> i believe increasingly people of his mind-set are willing to go over, i believe it's only the second worst thing that can happen. the worst thing that can happen is we extend all of this stuff which we could do with the stroke of a pen, cancel the sequestration, life to go on merme merrily except the country will go over another cliff. >> what is more important rates higher on the richer or vibrant growth in a economy. >> you set up an interesting dichotomy. >> the one thing he wants to be remembered for is raising taxes on the rich in. >> in the second term the thing he'll want to be remembered for is a comprehensive budget package that solves our long-term deficit problem. if he does that, he will go down

in history as a near great or great president. if he doesn't people will view the second term -- what else is on the second term agenda, maybe immigration? we're not going to get climate change. >> fixing the debt is fixed by entitlement reform. is he willing to give on that side? >> i believe the president has come to the party ready to do a deal. >> if you're raising taxes and cutting spending what does it do to growth and gdp. >> you have to raise it carefully. the debt has been coming down automatically, part of why unemployment has not been coming down as fast and why gdp isn't growing as fast. you do it gradually. >> i see a lot of the moves on the high end sort of trying to overcome the income disparity growth over the past 20 years and i'm wondering whether successfully redistributing a certain amount of wealth and being stuck at 2% would still be

seen as a positive legacy for him, if he stayed at 2% growth but did raise taxes, is that a successful second term presidency if you don't get back to 4% growth and 5% unemployment? >> sure, i don't know if we'll get back to 4% growth any time soon. let me put it this way. everybody below the 2% has been a loser over the last ten years in this economy. median family wages are down 7% after adjustment for inflation. i personally believe globalization, technological change have played a big role. we need to help those people. if those people had been wiped out by a hurricane we would rebuild the houses. they have wiped out by other forces that have come to bear. it's the responsibility for the incomes of the top 2% to -- >> but it's not solved by taking from one and giving to the other. it's solved by growth. >> it's solved by a mix. growth is the most important. sitting here you're going to get growth if you create a

predictable, stable fiscal outlook forever the companies to operating it. >> kicking the can is a terrible outcome. we had obama and boehner, cantor and biden, the super committee, the gang of six, the time is now. i believe that the recognition is that the time is now. >> all lower marnlal rates. >> no, and i also believe the legacy for the president is say vibrant economic recovery. >> i agree. >> if there's a political chip on the wealthy i don't think it's 250,000. >> it shouldn't be the holy grail. >> i believe it's a political talking point. >> first it was obama care, when you were focused on the economy -- >> we need significant revenue to work. not a majority, man a quarter of the package will be revenue. >> we had increased revenue when we had growth. we had 18% or 19%. >> we're going to continue this conversation around the table, greg is sticking with us as is

steve. >> still to come on "squawk," senator bob corker sounds off on taxes and the ifisical cliff, because black friday is in the books. now we turn our focus, we have a name for every day basically, now it's cyber monday, lots of deals. i don't know what tomorrow s takeover tuesday. cart know reagan will run through some of them after the break. if we want to improve our schools... ... what should we invest in?

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comscore says americans are expected to spend $1.5 billion shopping online today. cnbc's courtney reagan is monitoring the deals. brian shactman is in dodgeville, wisconsin at land's end. >> wearing a sweater. >> wearing a sorkin sweater but it looks good on him. i don't know, it's weird. courtney, what is going on? >> joe it's early but consumers are planning their cyber monday purchases. google sent us their first data poll of the morning, not surprisingly electronics leading the way and three retailers are making the list. the top five google shopping search queries in the u.s. include laptop at number one, nexus 7, television, amazon ipad mini, ebay and walmart coming in nine and ten. retailers have upgraded to

handle heavier load times. consumers spent more than $1 billion on black friday according to comscore. consumers are becoming moring agnostic and expect a seamless experience across platforms, it's going to be really important today. the nrf expects more than 129 million americans to shop online. 40% of retailers offer free shipping, offer up 12% from last year and while it's back to work for many, 44% have said they'll shop in the morning. web traffic is forecast to spike around lunch. atobe has the most bullish forecast for cyber monday predicting $2 billion in online sale. brick and click retailers will bring in 450% more than todayer

have's a typical day and online only retailer also see a sales spike of 200%. brian shactman is in wisconsin. >> reporter: land's end, we're already humming here just about 6:15 a.m. local time, it's in a pretty good sweet spot. look at some of the national reation federation numbers. 50% of the people who shopped friday spent it on clothes and accessories. people spend money on everything else. i was surprised how the percentage was so low on jewelry but a lot of what courtney said bears itself out in the numbers. when it comes to land's end and courtney talked about the hybrid model, exactly what's going on, they've been doing online "doorbusters" since last wednesday all the way through today and for comparison, it's still important to have a big cyber monday, they processed at their peak hour last year of 21,000 orders the entire day they did 180,000 orders on cyber

monday so it is diluted and obviously a big deal and andrew, we have a jobs element to this story, like fedex and u.p.s., they will add workers for land's end, about 1,000 temporary workers in the next month to handle another shift and also it's pretty much started as more of a catalogue company and all of their customer service reps are right here in wisconsin, and i will tell you this is not a land's end sorkin sweater but i'll look at their collection, andrew, and if you want one, you should definitely let me know which one you want. >> thank you for that, brian. put in an order right now, just i don't know, a bright color but nothing too hideous. joe will make fun of whatever it is. >> no, i said he looks good. >> i want to put in my order for a land's end sweater as we're on the air. >> i don't think the sweater makes the man. >> occasionally it does. brian thank you for that. we will see you soon.

republican senator bob corker's plan to dodge the fiscal cliff. we'll have him in just a moment. don't go anywhere. today's aflac trivia question, which current member of the philadelphia phillies won the american league cy young award in 2008? the answer when cnbc's "squawk box" continues. this christmas. yeah, how will you pay for things like food... electricity? dental bills... gazooks. you need a back-up plan. [ santa ] ho, ho, ho. that's why we have aflac! so i'll have cash to help pay bills! great...but what if you're still not better by christmas? hmm... afllaaccccccccc!!!!!!! [ male announcer ] aflac. we've got you under our wing. rudolph's better... but now blitzen's sick!

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now the answer to today's aflac trivia question. which current member of the philadelphia phillies won the american league cy young award in 2008? the answer, cliff lee. >> aflac. >> welcome back, everybody. u.s. equity futures at this hour, we have been looking at some red arrows. dow futures down by about 68 points, s&p futures off by 7.25 points. we've been watching what's been happening at the weekend box office. "breaking dawn part ii" taking in $64 million. daniel craig's bond adventure

"skyfall" came in at number two and "lincoln" finished third at $34.1 million. >> have you seen, i made fun of the "twilight" saga the lines. >> you said you saw carl. >> some of the men with their kids. i saw one -- >> it was pretty good, i watched them. >> you think they're good. >> yeah. >> i saw one with my daughter i thought it was the worst, bar none. i sent a check acting lessons for everyone. >> you haven't taken blake to enough movies. >> the guy or the wolves all they do is run around with their shirts off, that's the only reason they're there. the girl is in love with everybody. >> it's because you didn't start watching from the beginning. >> i didn't know what was going on but it was horrific, it was the worst -- >> two things, penelope must take blake to most of the things. >> i didn't want to watch, a lot of open mouthed kissing.

>> i saw silver linings playbook over the weekend, absolutely fantastic. if you do nothing else go to see the movie. the new de niro film. >> he plays a philadelphia eagles fan. >> what's it called? >> silver lining playbook. >> robert de niro. >> and bradley cooper is the star and it's off the charts. >> when we come back we'll talk about weekend winners and losers in the retail space, find out where people shopped and what it says about retail stocks and republican senator bob corker, join us with his plan to dodge the fiscal cliff will. with the spark cash card from capital one, sven gets great rewards for his small business! how does this thing work? oh, i like it!

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welcome back to "squawk box" this morning. few interesting analyst calls out today. facebook upgraded to outperform from market perform at bernstein, target increased to $33 from $23, a notable call because the bernstein analyst was perhaps the most well-known bear at the time of the ipo and yahoo! was added to the

conviction buy list at goldman sachs so watch that stock and finally research in motion upgraded to sector outperform from sector underperform at cibc world markets. joe, back to you. >> goldman still has that conviction. >> still. >> still haven't figured that out, five years into this and still got a conviction buy list. senator bob corker out with an op-ed in "the washington post" on how to avoid the fiscal cliff. he joins us from washington. reasonable people i'm hearing it from more and more say that kicking the can is not the way to go and if we have to go over it, we should go over it. i'm hearing that from republicans and democrats. are you picking up on that, too? a lot of people think that just more business as usual is not the way to do it. >> i couldn't agree more. i don't see the need to go over the cliff. the fact is that this congress has had two dry runs. we've scored every kind of option there is both on the revenue side and on the

entitlement reform side and what we need to do is make some decisions. this is easy. steve rattner and i could probably work out a solution before lunch today but i'm encouraged that the president and speaker boehner both are showing flexibility. the fact is that this is really easy to do. i've written a 242-page bill, that's it, it's got over $4.5 trillion in savings by the time you include the budget control acts 917 billion we enacted, it replaces sequestration. this is easy technically to do. let's make the decisions, rip the band-aid off, do the things we were hired to do and let's begin january 1st focusing on the greatness of the nation and put in place -- go ahead. >> bob, does it extend the bush tax cuts for people making over 250,000? >> it's got $1 trillion in revenue. >> does it extend those? he has said repeatedly he will veto anything that extends the bush tax cuts for people making

anything over 250? he'll say that all week long, going out on the stump. >> it caps exclusions at $50,000, it puts in place something called chained cpi, which changes the inflation rate which moves people into tax brackets more quickly, but it also controls entitlement spe spending and social security was created to capture 90% of wages. today it's at 84. if you move that out through 2050 it creates revenues, that's $1 trillion. there are all kinds of ways of doing this and that's the point of my op-ed, this bill can be improved, but i think the last thing that people like you who influence the way policymakers think, the business people who come in your program, the last thing that you need to do is talk about us kicking the can down the road as if this is too difficult to do. it's not. all it takes is political courage. it's not technically difficult. it's very easy for us to get

this done over the next two or three weeks as long as you have two willing partners, partners who are willing to look at revenues and partners who are willing to look at real entitlement reform. we started out with an air that says this is possible and it's easy to get this done if we'll make the decisions that need to be made and that's what you should be pressing us to do. >> senator, does your plan raise the $250,000 a year income threshold or does it change or increase marginal rates? >> what it does is it caps exclusions and it generates that portion alone generates $750 billion. >> sorry, that portion does what, bob, it raises how much revenue? >> 750. you add the other two components it's over $1 trillion and there's a number of ways of doing this. the point is the very high income or the ones who are paying the increased rates but it's a pro-growth way of generating revenues.

>> senator, we could talk about all the different numbers, but when do you think we're going to actually get down to brass tacks and people will sit down and negotiate this? >> i think they're already beginning. the staffs are already talking. we've shared this bill both with the white house, but also with boehner and mcconnell's office, we did that early on. i think they're already beginning and again the last thing that our country and people who, pundits and others need to say is that we cannot get this done this year, so again it's a willingness of two parties to sit down and look at the options that have been scored. this congress is more prepared than any congress in history to address this issue. we just need to do it. >> i don't think it's pundits at all. we're rising above here. we can get you buttons so you can rise above but there are people, patty murray, a lot of people that say if the rates are not going to go up, if marginal

rates aren't going up, let us go over the cliff. you have guys like trumpka and certain aarp constituents don't want any messing around with entitlements whatsoever. someone is going to be really unhappy, if we were to do your bill as it is right now, senator, there are people that are going to be really unhappy and they're going to be throwing spitballs at the president if he agrees to it. >> bob, what has been the feedback from the white house? >> they would never do this. >> if you find a way to raise revenue but doesn't change the marginal tax rates. >> we sent it to the white house through erskine-bowles and we did that last week. you cannot solve this problem without creating sacrifice and pain throughout the system and we all know that. this is tough. the longer with he wait, the lesser menu of options we'll have and the more draconian the decisions will be, so look, we

all know, look, i'll tell you this, 98% of what is in my bill is going to happen. the question is, is it going to happen now, and we can begin the next year, you know, focusing again on the greatness of our country or are we going to kick the can down the road for another six months, another year. at some point the kinds of things that are in this bill are going to happen and as a nation, shouldn't we address that now while it's easier, you can do it in a more timely way than waiting until we get into a deeper and deeper hole. that's the point. >> most people say tax reform last time it took four years, three years. you're saying you could do this with a $50,000 cap and it's only 243 pages. people don't think that, senator. >> i know they don't think that. people have spent two years around here crafting bills that lay out a process, they're like 1,000 pages long. it's so much easier just to

create a bill that implements the policy. the tax piece of this is four pages long. people act like this is such a heavy lift. it's not. the lift is -- >> steve doesn't like this. >> steve is willing to go over the cliff. >> i'm totally with senator corker on the idea of getting this done and getting it done now. the question is where do the compromises come. if the white house said we'll take the top rate of 36% or 37% instead of 39.6 and have a different cap on deductions are you open for those kinds of compromises? >> steve, i don't know of any republican who has written a bill that shows $1 trillion in revenues and i've done this to help break the dam. i'm not going to obviously negotiate on "squawk box" as to what i would be willing to do but i'm showing a way to make this happen. am i showing flexibility yes. many of my republican are in the

same place, absolutely. the point is, steve, these changes are really not hard to do. look, i'm open to whatever, i know speaker boehner has shown a willingness, the president has shown a willingness. we have to have real entitlement reform. that at the end of the day, steve, to me is the issue. i think the republicans are showing flexible on revenues. i think it's going to be the real entitlement reform piece that is crucial to this. i'm optimistic as we begin, but again, for all those in america who care about this, this is simple to do. it just takes courage, that's what you guys have hired to us do, let's execute, let's begin the year focusing on the greatness of this nation. >> senator, that's good advice. we'll try and do that. it is a great nation. we'll find it. senator corker thank you, very appreciate it. so what happened on black friday?

how strong of a shopping day was it and will it be enough to bolster the holiday season overall? john lawrence is with us from memphis, managing director and senior research analyst at stevens and if you want to break down what happened you have to first look at walmart, the biggest of all the bigs out there. what did you read or glean from walmart's release that they put out? >> good morning. first of all, you know, very positive, certainly we've talked about for a long time when walmart is, has inventory correct and they send the message to the public that they're going to be aggressive on price more times than not it works. black friday and the thanksgiving promotions were another indication of that. it was their best black friday ever, certainly the one-hour guarantee where you didn't have to worry about would you get that item, certainly played a major role and certainly people were guaranteed that item and they had big crowds and people

focused on those savings. >> john, what we learned with walmart last time around is that margins do matter. is this an issue where they could be bringing people with sales that end up not necessarily helping their bottom lines? >> there's no question a lot of people will -- that's been part of the investment strategy at walmart now for a couple years, and the point is, they've been able to leverage and certainly for the fourth quarter we're looking for a 1% to 3% comp.. obviously at the high end of that, you could get a better point to leverage. we think they'll continue to make investments and cost cuts that they can offset this investment in price, they've been willing to do this and been able to snow over the last several quarters. >> so you didn't change your perspective at all after walmart's last earnings quarter? there was disappointing news in that. >> there was a little bit on the top line but once again, i think there was some noise and some expenses as well, some of these

lawsuits, et cetera, but from an operating earnings gain, and some of the things we're seeing and the most important thing is the initiatives at walmart are driving traffic into the store, that's the most important thing i think we take away from this. >> how do you compare walmart against someone like a target in. >> well, i don't follow target as closely. i just know that in the rural south and where a lot of the smaller markets, i mean walmart is, there's so much more prevalence and have a larger space and presence than target and some of the smaller markets. >> what do you think about where the americans are playing out and how this plays out for the rest of the holiday shopping season. you can glean expectations from black friday but with a long period between thanksgiving and christmas sometimes that doesn't tell you everything about what's going to happen. >> exactly. obviously we've still got some time and we'll see as we get closer to christmas what happens with the public. obviously they continue to look

for deals, the markdown cadence at some of the retailers, what will happen over the next couple of weeks as far as giving the deals and a lot of people are waiting for the last-minute in time of need, but obviously following senator corker's comments, anything to help and make the public feel better about the fiscal cliff would certainly impact that consumer. >> john, thank you for your time today. >> great, thanks for having me. coming up our disruptors series continues, an exclusive report from ge's chief economist on the industrial internet, bringing digital intelligence to the physical world of industry and top of the hour, lawmakers. ed to meet again on a compromise to avoid the fiscal cliff. we're going to rise above the rhetoric with john harwood at 8:00 a.m. eastern. man these guys are slow. reminds me of our network before cdw virtualized it. how? cdw and hp networking implemented a virtual

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general electric unveiling a ground-breaking new report on technology innovation called the industrial internet, pushing the boundaries of man and machines and joining us now from san

francisco, marco anunziata, a chief economist at ge and executive director at global market insight. marco, can you explain what you're talking about here? i remember long ago you heard of this guy jack welch, when people talked about the internet being a fad and all these companies back in the '90s and a lot of them fell by the wayside, the one thing that was going to happen was that business and industry was going to be able to use the internet and then b2b came about. can we handle it now? the time has come? >> i think the time has definitely come and it's going to be big because the industrial internet is the next productivity revolution. let me explain what we mean by industrial internet. the industrial internet brings together intelligent machines and people so you embed the sensors into machines, into

equipment and we're talking about jet engines, power turbines, medical devices, and these sensors generate an enormous amount of data and with software analytics you can analyze the data and optimize the performance of the assets, you can optimize the way in which the assets are used which means for example that in the case of airplane engines can perform maintenance before something goes wrong and not before the airplane is due to take off so you avoid delays. in the case of hospitals you have a better management of hospital beds, of medical devices which means you can provide better health outcomes to more patients at lower costs, so we have a huge installed base of assets in the sectors we operate in from locomotives to jet engines, power generation, hospitals, and we can see the benefits this is bringing in terms of greater efficiency to our customers, and greater cost-effectiveness of our services. in the bottom line of this, will be a huge impact on

productivity, so fast economic growth, faster incomes growth and faster jobs growth in the u.s. and in the world as a whole so it's huge, and it is here. it is starting now. >> really. so you're talking about a sensor. is it a little wireless sensor that actually has, i don't know, it's reporting back to some server somewhere what's happening and there must be software written that congeals all the information to allow to you do these things? are we talking about wireless sensors in every single device? >> that's exactly correct. we're actually talking about multiple senators in each device potentially, because each device will be made of various moving parts and you can associate a different wireless sensor with each part and send into the cloud a huge amount of information. once you have the analytics to analyze all that information, there is virtually no limit to the improvements in performance that you can generate. >> marco, how does this differ,

this idea of the industrial internet, beyond the sort of marketing scheme of calling it the industrial internet from what ibm is doing. they talked about the smarter planet campaign which to me seems similar. am i wrong? >> i think you're wrong. i think what is different here is that the industrial internet, they're calling it industrial because it really starts from the application in industrial machineries and machineries which you will see applied this in advance. so these are sophisticated medical devices, jet engines, locomotives, power generation turbines and the difference with big data is exactly the fact that you are operating directly in the machines, and you are improving not only the performance of the machines but you are moving towards greater degrees off automation. all these devices are getting increasingly complex, so what you need to do is get these machines to be able to operate in a more and more automated way, and by the way the other thing you're doing is you are

embedding intelligence into the data. you're creating situations where the data themselves, whether it's the result of an mri in a hospital, or the performance of a jet engine after a flight, the data itself will know where it needs to go and get to the technician, to the doctor involved as quickly as possible. so it is different. >> marco, with all of the new technology that's been introduced in health care over the past 20, 30 years, there's always been this idea that eventually you would become more efficient and therefore less expensive but ultimately it's become more expensive. how does this change? >> part of it is an issue of incentives and right now there is no doubt that there is and there will be increasing pressures in the health care sectors to be more cost-efficient. it relates also to the medium term fiscal picture in the u.s. so the incentive is there, and what you need to do is to have the it technology in place that allows you to do that. for example, in the case of sensors that allow you to know

exactly where all your medical equipment is, these are sensors that with the right software will allow to you provide care to a lot more patients over the course of the year at lower cost. so the difference is the technology is getting more powerful and incentives to take advantage of the technology to lower costs are getting also extremely strong right now. so you will see it. >> marco, this is greg brown from motorola. you're talking about the ubiquitous deployment of sensors and cloud computing and storage and massive storage in computing speed capability and machine-to-machine communications, as this contributes to the next level of industrial explosion if you will or the industrial internet, who do you see as the winners, industrial or companies that are the big beneficiaries of this big technological break-through? >> i think the first winners will be in the area of advanced manufacturing. sophisticated manufacturing equipment is the one where you will see the most immediate

application of the industrial internet. then i would expect the benefits to become much more widespread. we are calling it the industrial internet but it will spread to services via the improvements in productivity. i think you will see it operating like the first wave of internet revolution, the information dmun indication technology revolution we saw in the mid '90s where it started in industry and gradually broadened to boost productivity in the whole economy. the first point of contact will be advanced manufacturing and this is where it could have a very strong competitive advantage for the u.s. >> marco, interesting. brave, new world. we appreciate your time today. for more on this and other, go to disrupt eedisrupters.cnbc.co. when he said that to have a sensor that will tell you when a part is going to fail, do you

remember in 2001 that's how we got the first word howell was screwed up, he said it's going to fail and they went out and got the computer at home, the other h.o.w. said we don't sea see anything wrong and they brought it in, it was not going to fail and that was the first thing. >> everything' running smoothly. >> i get nervous having machines doing this many things. >> i think this is going to be. >> you do. >> in a motorola example -- >> you never had a how. you're ibm, somber, sorry, i knew it was something like that. >> we're putting more intelligence sensors in our enterprise products, smaller example would be rfid, capturing that, asset management, inventory management, and public safety which is the heart and soul of what we do, putting intelligence sensors and video surveillance to capture situational awareness, bring it back to a 911 or command center

and do the deciphering and discerning. >> we're going to have sensors in us. that's the market of the beast supposedly if you get something stuck. >> it tells you anything you do. >> sleep, walking. >> and you wear it on your right hand which is weird for me. beck? we'll continue the conversation with greg brown in a moment. "squawk" will be right back. from currency trading for a few to a currency market for everyone. the potential of fxcm unlocked. nyse euronext. unlocking the world's potential. the potential of yelp unlocked. nyse euronext.

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welcome back. we have' had two guest hosts for the last hour, getting final thoughts from greg brown, chairman and ceo of motorola solutions and greg i have just checking out your stock chart. you said it's been a year and a half. >> a little bit more. >> since motorola solutions spun you have and that is an impressive stock market. what are you guys doing? >> i think it was finally about motorola unlocking the value of the firm, we had a conglomerate discount and not performing in certain businesses. we spun off the mobility business got acquired for a 63% premium by google for $12.9 billion. we've gotten more focused on a pure play, mission critical public safety and mission critical enterprise. we've returned over 3 billion of capital to the shareholders, initiated a dividend, the stock

is up 45% in a year and a half and we're well positioned going forward. >> how much do you rely on government spending? i ask in the context of the fiscal cliff conversations, a company like lockheed martin has 83% of its revenue coming from the federal government. >> we're two-thirds government, one-third enterprise but in that government segment becky it's really u.s. state and local. and international, so the fiscal cliff and everybody talks about the dra coneon armageddon with defense contractors that's not us. our government is state, local, homeland security. >> do you expect google to make handsets five years from now? >> very, very tough business. mobility lost 530 million last quarter. i think it's a tough road. there's room for apple and samsung and maybe one other player. tough. i'm glad we got out of the business and are focused on what we're doing. last point on fiscal cliff, it's not about ideology and not

about -- >> oh yes it is. >> it's about making a deal, not a point. i'm optimistic we can do it. >> you should get into the censor business. >> thank you for being here. we really appreciate it. coming up, crunch time for retailer, we'll get a cyber monday report from power retailers. d to cost a fortune. nobody said an all-in-one had to be bulky. or that you had to print from your desk. at least, nobody said it to us. introducing the business smart inkjet all-in-one series from brother. easy to use. it's the ultimate combination of speed, small size, and low-cost printing. well that was uncalled for. folks who save hundreds of dollars switching to geico sure are happy. how happy, ronny? happier than gallagher at a farmers' market. get happy. get geico.

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forget doorbusters. >> i've got it. ahh! >> i got it! >> it's cyber monday, when shoppers turn to the net for the best holiday deals. >> so what's the deal? >> my mission is to protect you. >> you'll get an update on retailers' expectations for the season. and it's also a crucial time for charitable giving. the president and coo of the american red cross will tell us how the year is stacking up so far. avoiding the fiscal cliff. >> ahh! >> the consequences for economic growth if politicians don't rise above the rhetoric and get a deal on debt. the third hour of "squawk box" begins right now. ♪

welcome back to "squawk box" on cnbc first business worldwide, i'm joe kernen along with becky quick and andrew ross sorkin. our guest host, duelling guest host, greg brown from motorola is gone, steve rattner former obama administration car czar. it's willett, are you in timber? >> thomas willett, first mayor of new york. >> he's working for the mayor. this is the mayor's money. >> that's right, that's cool to be a guy who has his own advi adviser. like michael dell, this is his guy. >> not just a guy, a lot of guys and gals. >> exactly. willett advisers chairman and also on the steering committee of the fix the debt campaign. more from steve still ahead. first your morning headlines brought to you by becky quick. >> thank you, joe. >> you're welcome. >> among our top story the national retail federation says a record 247 million shoppers

visited stores and websites over the four-day holiday weekend up 9.2% from a year ago. americans spent more money while they were out shopping. the average holiday shopper handed over $423 up from $398 last year. eurozone finance ministers and the imf are meeting to freeze the second bailout package for greece but first they have to agree on how to cut athens debt to a more sustainable level. we'll get an update from michelle caruso-cabrera at 8:30 eastern time. let's look at the markets here. we have seen red arrow this is morning. the dow futures down by about 71 points below fair value, this is as the markets look like they're giving back some of the big gains we saw last week, over the course of the week last week the dow was up by 421 points for a gain of 3.35%, you saw stronger gains if you looked at the nasdaq. overseas in asia, we did see those markets end up well mostly red arrows across the board.

hang seng down by 52 points, shanghai by ten points. in japan the nikkei gained 22 points and europe you're seeing more of what we've been watching of the futures here, there are red arrows there as well. the ftse down by 37 points, in france the cac is off by close to 0.9%. in germany the dax is down 0.3%. brian shactman is talking about cyber monday. how much does it mean for the retail world? for a power retailer land's end is means a lot. brian is in dodgeville, wisconsin. >> reporter: andrew t is their busiest day of the year but it's interesting even though the cyber monday concept is only a few years old companies like lands end have been doing online koor busters from last wednesday through today. the classic canvas tote if you had a baby in the family, people send about 20 of them to you, they had it on sale usually $25,

it was on sale for $10 starting at 5:00 a.m., it sold out in 33 minutes. they had a fleece blanket a couple days ago as a doorbuster, sold out in 11 minutes so people clearly are going on the web to find these deals and this distribution center here in dodgeville, wisconsin, is completely ready for it. they have about 50 u.p.s. trailers out back, there are seven miles of conveyor belts ready and in terms of staffing they go from 6:00 a.m. to 4:30 p.m. at this distribution facility, they'll take another shift all the way through to midnight, but it is fascinating when you talk about marketing concepts, guys, because there are some people i talked that think the whole cyber monday image will be gone in a few years, we'll get a complete hybridization. the concept here at land's end is to bracket thanksgiving, start before it and end after it and have sales different ones every day all the way through.

>> brian, thank you, we'll see you again in the sweater. i think it looks better on brian than me, i will say that. brian, see you soon. lawmakers expected to work on a compromise deal to avoid the fiscal cliff. cnbc's john harwood joins us with more. >> good morning, andrew. >>? i shot at anything happening this week? doesn't feel like there's negotiations going on. feels there's public campaigning on each side. >> i wouldn't expect anything to happen this week, andrew, but i do think there is a lot of discussion going on that has a considerable amount of promise that something will get done before the end of the holiday season, before the end of the year. they're likely to come up with some sort of a framework for resolving the cliff, raising a certain amount of tax revenue, cutting a certain amount from entitlement programs and other programs and fill in the details in the early part of 2013 but you saw yesterday on some of the

sunday shows people like lindsey graham making the argument that yes i'm willing to put tax revenue on the table, not rates but revenue, but that's a big concession by republicans because they have not been willing to do that before except revenue as it comes from growth. they're talking about something different now, talking about actually raising taxes if not tax rates themselves. >> that concession, john, is it big enough to where democrats would then say wow, that is a pretty -- would they realize that's a big enough concession to say i'm not going to have feet in cement on marginal rates and not going to have feet in cement on entitlements? you have two things that are democrats now are getting just hammered on by the left, by trumpka and others. you have to give on the marginal rates and give a little on entitlement and i don't think they'll think that's a big enough conception from republicans to do that. >> that's what negotiations are about. the president himself indicated

he's willing to move some on entitlements. for republicans the evaluation will be have they really moved, is this fundamental reform, is this something that will make a difference as opposed to patching and filling and democrats from the other side make the argument, is this real revenue, is this real money that will make a difference, that's part of the give and take. i don't think marginal rates themselves are a principled point of disagreement from the democratic side. there are groups on the left who say heck yes we want the rates up to where they were when clinton was president to 39.6 but if there are other ways to get money for example -- >> i could write the president's speech right now he's on the road this week and every single time he'll be talking about 250 and above and the bush tax cuts. >> um-hum. >> you're saying that's not that big a deal. is it just still more bargaining and posturing to stake out that side? he's done it so many times. i don't see how he can go back on it. >> there are different ways of

getting money from people who make more than $250,000 a year. you don't have to do it through rates. for example one of the things they're talking about is essentially making the effective tax rate, the average tax rate for people at the top uniform, that is not give them any lower benefit from the lower brackets up to certain levels of income, the 10, the 15, the 28, i forget what the lower brackets are. that's a way to get money. the question is how much money can you get. >> not that much. >> and the other option, and i talked to kent conrad about this ten days ago or so when carl quintanilla and i were on the white house north lawn doing interviews. >> right before you were arrested. >> what? >> no, i'm kidding. get off of the -- what are you doing there, you snuck on there? you're allowed. go ahead. i threw you for a loop. go ahead. >> conrad. you've been there. conrad was talking about the possibility of leaving the

individual marginal rates untouched but going up on cap gains and dividends. there are different combinations. >> i know. >> again the president in his news conference said -- >> so many times. >> -- you can do it without raising the marginal rate. >> he said i'll veto any bill that doesn't let them expire on 250 and above. he said that so many times. why keep saying that. >> he said it. but -- >> he talked about doing that in isolation. in other words if they get day deal that obviates any veto talk. the question is what are the elements of a deal. >> i thought he said any bill, "i will veto any bill that extends the tax cuts on 250 and above." >> that was in response to republicans saying let's do a one-year extension or two-year extension. he's in a negotiation and the outcome of the negotiation is going to trump the veto.

>> do you think the president would be willing to let us go over the fiscal cliff unless we have real deficit reduction, do you think the president is determined to have a legacy piece of legislation as opposed to hodgepodge that gets us past the cliff? >> yes and democrats are willing to do that, too. they believe that they've sort of gained the high cards by virtue of the election, by virtue of republicans losing strength inspect house and senate, losing the presidential race. you've heard this from some of the democratic negotiators, we'll let them go and propose a tax cut. >> john, you're like a clinton in a second term. you are tacking to the middle. you are tacking to the middle. i'm getting a little teary. >> joe, the only way that i was not there before was in your imagination. >> which goes wild, my

imagination. you are, john, i'm feeling warm and fuzzy. you're rising above, even though you don't have a button, but you're rising above. >> you know what? no, i'm not going to go there. >> go ahead, please do, because you know when you say it, it stays forever. i'll send it right to the ceo. anyway -- >> john, thank you for that, we'll leave it there and save everybody. >> tattle tale. if you thought the hewlett-packard autonomy was over think again. former ceo mike lynch says he was caught unaware. others would hide behind lawyers and he has not. couple things were shocking to me. he says repeatedly he didn't know that this investigation was happening and anonymous executive is quoted saying they actual lay proechd mike lynch

and said he was evasive, not forthcoming and didn't remember, after something like that, you don't bother telling him you're being investigated. and they're taking shots at him anonymously as well saying, this say weird one, on at least two different cross-country flights on an hp private jet, mike lynch went to the back of the aircraft and refused to talk with anyone for the entire flight, and then they have a spokesman for lynch saying that he had not been on a corporate jet before and didn't know the proper etiquette. very bizarre and strange story. >> the whole story is bizarre. it's hard to imagine that -- >> now we get down to petty things. >> right but the big story you've been talking about, it's hard to imagine revenue mischaracterizations could cost them 8.8 billion on an 11 billion acquisition. >> there is a bit of sandbagging in the numbers. there might have been problems

at autonomy and $8.8 billion seems like a stretch. >> i would put it the other way, this may turn out to be one of the greatest value destruction acquisitions in modern history that hp made such a mess out of this company. >> as a function of fraud? >> i think fraud will turn out to be a relatively small part. i don't think revenue mischaracterizations cost $8.8 billion. >> i think they said $5 billion was the write-down related to accounting misrepresentations. >> seems high to me. >> we'll continue on. coming up, 'tis the season for charitable giving. the american red cross president will join us to tell us how things are stacking up and the bottom of the hour the economic impact of going off the fiscal cliff, we'll talk to economist jeffrey cleveland when we return. . and his new boss told him two things -- cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up

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welcome back to "squawk box." in the face of destruction from superstorm sandy, how is charitable giving standing up this year? join success gail mcgovern, president and ceo of the american red cross and gail, thank you for joining us this

morning. >> thank you, becky, for having me on the show. >> we've been watching what's happened with superstorm sandy. we know the red cross has been one of the organizations that has risen to the forefront of this movement to try and help people. what happened in terms of charitable giving for superstarm sandy? >> my heart goes out to the people affected by superstorm sandy. i have talked to so many people who have lost everything including loved ones and it's just heartbreaking and i also want to thank our generous donors. they've stepped up and we're doing everything possible to put their hard earned dollars to work. this has been a massive operati

operation. we've served 7.3 million meals and snacks in four weeks. in terms of how it will impact giving we recently did a survey and what we learned is that three out of four people who donated to hurricane sandy will continue to step up during the holiday and donate to their favorite charity and 90% of the people that provided political contributions plan to donate to charities as well which was very heartwarming because i know that everyone in the non-profit sector is concerned about that. >> gail, when we look ahead we talk about the fiscal cliff and some of the fixes and solutions and proposals out there to change tax law. programs suggest maybe you need to cut the deduction for

charitable giving. what would that mean to an organization like yours? >> we hope that doesn't occur obviously, but having said that, the american public's generosity never ceases to amaze me and they seem to step up because they want to help people that are less fortunate than they are and time and time again i have seen that over the last four and a half years that i've been with the american red cross, and it's made me very optimistic in the spirit of american giving, and i believe that people will continue to donate regardless of the tax law changes. >> would it impact your organization or not, you think it would not impact it? >> well, it's hard to tell. you know, i'd like to believe that people donate because they think it's the right thing to do, not just because they get a

tax break. time will tell. >> gail, are you dependent on the really big bucks guys like if it goes to, say it went to 50 on a cap, you'd still get, the average donor that gives to the red cross it wouldn't affect, that still would be tax deductible but are you dependent on people giving $1 million or whatever? i'm sure there are a lot of people that do that as well, right? >> well, we get large donations primarily from corporations and corporate foundations, and we get lots and lots of small gifts. as an example, during the earthquake in haiti, we got $32 million from texting $10 at a time so we also get very small gifts as well as large gifts from corporations. >> but not individuals giving $10 million usually so it might not hurt you that much if it was a cap at 50,000.

>> as i said, time will tell if that will have an impact. i hope it doesn't. i believe people give because they think it's the right thing to do. >> if you had to look at some tax proposal senator corker was his proposal to cap any deductions of $50,000. simpson-bowles would eliminate some deductions. my guess is you'd rather see the cap at 50,000? >> we would rather see the cap at 50,000 obvious ly and other nonprofits as well. i have a lot of faith in our country and people's need to give, because they think it's the right thing to do and i hope that holds regardless of what the tax laws are. >> gail thank you for your time. if people want to give to the red cross they should go to the website, for superstorm sandy?

>> redcross.org. they can learn how to make financial donations, brows through our gift catalogue, learn how to donate blood and learn how to volunteer. there are lots of ways to give back. >> thank you very much for your time and we wish you the best of luck with your efforts. >> thank you so much, becky. >> makes it a lot clearer. am i a team he ward or team jacob? >> after what you told me i think you're team edward. >> the reference to "twilight." >> he has more makeup on, patinson, he has more makeup on than i have. probably not. coming up -- as lincoln, this guy had more makeup than i wear, as abraham lincoln generating oscar buzz but could he hunt down the vampires from "twilight"? it's funny you would say that because there is an abraham lincoln hunter vampire. >> i just read that book. >> you read that book?

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welcome back to "squawk box." the "twilight" saga "breaking down part two" took in $64 million during the five-day holiday stretch that began on wednesday. "skyfall" came in at number two. "lincoln" finished third with 34.1 million. when we return we'll look at the international flash points that are affecting global markets. we have chief international correspondent michelle caruso-cabrera bringing us an update and the economic issues driving the month of december. jeffrey cleveland on consumer spending, the european christis and america's fiscal cliff. tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer.

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welcome back to "squawk box" been among the stories we're following, morgan stanley is upgrading equities to attractive from neutral. autos and farm suitals raised to overweight, telecom and utilities downgraded and morgan

stanley prefers europe to the united states and is increasing its exposure overseas but still the broad class of equities looks like it's getting an upgrade. onyx is buying usi for $2.3 billion. >> nice little deal. >> it was supposed to be tuesday or takeover tuesday. >> mcgraw-hill is that the last revenue? >> close. >> close to apollo. would they be out of the textbook business at that point? that is weird. i think of mcgraw-hill every -- >> they've become s&p. >> why would apollo -- >> is that good or bad? >> is the business still viable? >> eventually it will go digital. for the moment it's viable. >> it's about the content. >> sure and the function of the price. >> textbooks are still a great business. they won't be forever but

private equity has been owning textbook businesses. >> somewhat mixed results. >> you can make people buy the books for a lot of money. >> my daughter has an ipad and i cannot get used to having a big old book. >> your daughter has it on an ipad. >> i used to carry around a knapsack with 20, 30 pounds of books. >> now you're sounding old and crot crotchety. it builds character to have the heavy books. >> and trudging through the snow. >> uphill both ways. >> exactly. >> michelle caruso-cabrera is with us this morning, she has an update on international flash points and how it's affecting local flash points. >> let's go around the world, egypt, violence in the streets again today continuing protests after the president of egypt declared for himself a broad range of autocratic powers thursday night, the stock market in egypt opened yesterday, much

of the middle east thursday is the end of their business week, the market plunged, a little bit of recovery today. speaking with sources in the banking sector they're worried whether or not the president says the powers are temporary whether he means it. there's a euro group meeting today, they might eventually agree to give greece the money. the narrative stands that greece gets the money, they have to calm concerns about the imf. spanish elections in the catolca catalonia win the regional elections. the stock market reacted a little bit, it would have been worse if the leader of the separatist movement had done better. let's move on to what i think is

the most interesting story and could definitely affect a lot of investors who watch cnbc, argentina. during all the retail hubaloo, a federal judge in new york ordered argentina to pay nml securities $1.5 billion. he has ordered this many times before. what is different is the remedy. there are two things that investors need to know. if you are invested in an emerging market hedge fund you should be worried about whether or not argentina will pay a gdp warrant december 15th. they very well may not and most indexes when it comes to the emerging markets contain argentinean debt. is it going to be systemic if they don't pay it? no, but you could be affected. the second thing is the remedy that the judge has imposed. this is very interesting. he knows argentina will never pay so now what he said is i don't care if argentina doesn't pay. all of you third parties that

are involved in helping argentina pay one set of bonds, if they transfer that money to you, you have to give some of it to paul singer of elliott management. so bank of new york is the trustee. they've gone to the judge saying how do you do this? help us figure this out. he is imposed this on third parties. this is problematic to the payment and settlement system of the international financial community. people are perplexed. it's gotten to the point where the u.s. federal government filed an amicus brief on behalf of argentina because it's so problematic. the judge has the authority, he has jurisdiction over u.s. institutions and he can say go ahead, defy me, which is what he's done. he's done this on purpose -- >> the u.s. government has filed on the other side. filed the amicus brief on the other side. >> right but he is so furious with argentina, fighting with them for ten years n his '80s,

berates their lawyers in court all the time about all of these issues, he's had it and wants to bring this issue to a head now. she has said no way, federal court. >> they claim they're going to appeal, it will be difficult to get an appeal. december 15th will be extremely interesting to see what happens. this story keeps on giving. christi christina kirchner was worried because they've seized a vessel in the port of ghana recently. we'll see what finally happens when it finally gets done. >> steve you have any thoughts on how that might affect more broadly? >> no idea. >> the basque separatist? >> they would be the basque

country, a different part of spain. >> and portugal looks like they cut that out. >> at least they stick to the language. >> different word for every word? that's weird. >> greece, i think has the longest term systemic issues that still aren't going to be solved. >> i don't think greece is smic anymore. >> cut it off and let it go. >> angela merkel has an election next year, and she gets through it and we discuss the question and she drives the bus as well. >> she drives the bus no question. >> michelle, thank you. >> you're welcome. >> thanks, michelle. let's get a check on markets. joining us from the cme in chicago scott nations, cool name. >> sounds made up like a weatherman's -- >> president and cio and also nation shares which is a good name, his name and also an "options action" contributor and liesman. >> that's not a made up name. >> no.

>> taking out from tour, weren't you going to own up for stones, the mud puppies? >> no, the mooncussers played for bob yeager. >> scott, friday was pretty good, we're down again today. i think we're being held hostage more than stuff that happens in greece at least for now? >> i think last week that was the case. i'm not certain that's the case today only because i don't think that the fiscal cliff is going to be decided in the next 30 days and i'm not certain that anybody expects some sort of overarching solution. on the other hand, greece should have been settled months ago, and i think we're a little fed up there and we have all the finance ministers of europe getting together, imf seems a little recalcitrant, let's call it that. this has been going on for months, for years now and i think that the feeling now is, if we can't solve greece, how

would we solve italy and spain. >> corker just came on, senator corker, he said you do a $50,000 cap, 243-page bill, instead of sending it, instead of agreeing to do something in a year, it's not that, the lift is not that heavy to do something big, almost a $4 trillion deal between now and the end of the year. you think he's crazy, scott? >> my point is if it happens it will happen at the end of the year. i don't think there's the political will right now for anything to happen this week or next week. but that's my point t will take 35 days because if nothing else, republicans have to inoculate their constituencies. rates are going to go up a little bit. we're also going to cut deductions. everybody's ox will get caught, nobody will be happy. >> senator corker is talking about something different than from what everybody else is talking about. everybody else is talking about

a framework for a downpayment at the end of the year and then you move into next year you flesh it out. what senator corker wants to do, incredibly and wonderfully ambitious but i think probably unrealistic is get the whole thing done, every little bit of it in his 242-page bill, signed, sealed and done at end of the year. it would be wonderful. >> just to illustrate how hard this is going to be, reuters has a headline max bachus, chairman of the finance committee says he wants to preserve the estate tax break because it's important to farmers and wants to preserve the tax credit for wind energy. >> can't do that. >> everybody puts their hand up this is mine. >> it's less difficult, and -- >> cap you get to keep what you want. >> it's going to affect the high end, at 50,000 it wouldn't

affect -- >> steve, what do you think about the $50,000 cap proposal or another number? >> i think the cap proposal has some merit. in the real world you probably end up exempting charitable. apart from what the head of the red cross is, charities see this as potentially devastating. do you want it to apply to everybody or only with people with income above $250,000. >> if it's 50,000 or 28% cap of adjusted gross you end up exempting people with lower incomes because they don't use that much. >> there are people, there's actually two different things. the $50,000 cap there are not that many people but some people who would use it. >> how can you use more? >> state and local taxes, health care, all this stuff if you put it in there. >> there are some arguments that health care shouldn't be exempted anyway. >> i understand but there's also a view at least amongst some of us that the top 2% should pay

this trillion, $2.5 trillion whatever it ends up being and you don't want it to leak below the top 2%. some people advocating the cap know it would leak below the top 2%. >> why a percentage or dollar value? >> yes, because you'll never get something done where you argue should we do mortgage interest, charitable, health care, 401(k)s. you'll never get agreement. >> why handle it as a dollar value cap 50,000 as opposed to what the obamaedobama administr proposed, 28%. >> 28% doesn't matter as much, doesn't raise nearly as much revenue. that's the problem with it. >> the trillion you talked about on the 2%, over ten years. >> you need about 1.2 trillion over ten years to make the deal work. >> thanks to steve liesman and scott nations. catch scott on fridays.

unfortunately today is only monday. so you're jonesing for scott nations you have to wait until friday on "options action" which is at 5:00 p.m. when we come back, we have economist jeffrey cleveland on how to view the fiscal cliff. he says america's debt crisis is more like a garden than a cliff. he'll explain right after this. [ male announcer ] you are a business pro.

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jeffrey cleveland is the senior economist with payton and rygel. you have an interesting thought process about the fiscal cliff. you say that's a bad analogy, that it's really more like a garden, but what i want to know, if our economy is like a garden, if we get to january 1st and we don't have a deal is that the equivalent to releasing aphids into the garden or what happens? >> no, i don't think so. i object to the explanation of how the economy works and the image that's been created by this krisical cliff discussion is that of a car headed for this cliff and the only driver that can save us is washington. they got to steer us away and i think that's a wrong way to look at an economy. it's more like a garden and what do i mean by guarden?

there's no single group at the top that can manage that garden in a top-down fashion. it will be organic, bottom up and there are things they can do to harm things, releasing the aphids wouldn't be good but the real problem is, i was eavesdropping on that discussion in the prior segment, all the discussion about what's expiring, what possible tax plans could be, could they just kick this out into mid 2013? that's the real problem, that's the uncertainty. it's hampering people in our garden, hampering our clients. >> you're going to willingly be chauncey gardner, we need growing, we need roots. are you too young to have seen that? >> haven't seen that one, i'll put it on the list. >> "being there" due like to watch? >> you don't want to answer that one, jeffrey. we're trying to figure out it may be something where you can't manage the whole thing from

washington but would you agree that washington at least is the gardener in this situation and can decide whether to dump fertilizer all over the place or whether to weed certain areas? >> i think there are an unwanted visitor transforming all over the lawn, that he'that's the cl. if you believe in the car analogy and ignore the garden analogy, then you think that everything that ails the economy is a demand side problem so i see that from washington all we need to do is get a one-time boost to consumer spending. from mr. bernanke last week it's mostly demand side. >> you're going we need to have some tax policy that offers certainty and that will help everybody else kind of go about their business in the garden? >> that's how you'll be able to make longer term capital decisions, investment decisions, that's what will help entrepreneurs and the economy flourish. and the market seems to be happy if there is some deal before year end and pushes things out

to six months from now and i think that might be actually the worse scenario because it doesn't eliminate any of the economic uncertainty. >> that's where you find some agreement with steve rattner, our guest host and he had pointed out steven you think the worst case scenario is we don't deal with this. >> i'm coming around that we keep kicking the can down the road, businesses don't know what to do and never deal with the fiscal problem. everybody in america agrees on one thing, we have a major fiscal problem and we have to agree how to fix it. >> jeffrey what would you like to see in terms of a tax overhaul, looking for certain plans. would you take just about anything as long as it gives you certainty? >> something that sets it up not as a one off for the rest of the year but a longer term solution and cannot be focused on the high income earners. when you look at the revenues generated by the federal government, federal tax receipts

the income tax is important but there's all other taxes, namely social security tax on wage earners that are big and important as well. i think you need to have a bigger more wholistic take on the revenue side and same thing on the spending side. congress spends their time tinkering with what to me is one-fifth of federal spending and a full 63% of what we're spending money on are entitlement programs or automatic checks that just go out every year. they're not addressing those things. i think you need to have a bigger discussion. the problem is i doubt you have that discussion before the near end. that will keep economic policy uncertainty high and growth slower than otherwise and our garden will not flourish. >> strong roots need to the with aer it. that's awe your assignment, jeff. you got to rent it, being there, peter sellers, shirley maclaine, "being there."

>> i'm here early in los angeles. might take some time to dig that out. >> got to. jim cramer stocks to watch, we'll ask if he's fired up ahead of the opening bell. retailers ahead of the opening bell. so anyway, i've been to a lot of places. you know, i've helped alot of people save a lot of money. but today...( sfx: loud noise of metal object hitting the ground) things have been a little strange. (sfx: sound of piano smashing) roadrunner: meep meep. meep meep?

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welcome back to "squawk box" this morning. let's get down to the new york stock exchange. jim cramer joins us now. what's going on, jim? >> everyone would have expected given the fiscal cliff discussion negativity and i think sales would not have been that good in retail. i'm not hearing anything bad. i'm hearing big volumes. it's very encouraging. >> shopping. how much are you taking away from all of this? >> i think apple was a big winner. i think amazon is a big winner. i like what i'm hearing from macy's. urban outfitters. i like what i'm hearing from them. it's funny. we were up so big on friday that if we had -- we almost borrowed a really rally here. i know it wasn't supposed to be as strong as we're hearing. i come back to the idea that perhaps the reports underestimate the wealth of this country. the wealth in this country is extraordinary. >> did you see the piece in "the new york times" about hewlett packard and mike lynch fighting back.

>> i love a fighter. give me details. i know david will talk about it later. it is true. in the deal book you talk about how hewlett packard did not say fraud. i don't know. a big $5 billion charge, you don't do that for nothing. >> does meg last in all of this? >> yes. >> why? >> because they need some stability. it wasn't her fault. it isn't -- >> she was on the board though, right? >> look, cash flow is good. >> it wasn't her fault but has anything good happened with hewlett packard? >> nothing good is happening in that industry. there's nothing good at dell and dell is a good company. there's nothing good in the suppliers to these guys. there's a secular shift toward apple but people don't want to own apple. i think that's a mistake. i think apple is okay. >> we want to hear what david has to say about hp and we'll hear that soon. thanks, guys.

when we come back, the last word from our guest host. stick around. "squawk" will be right back. >> announcer: tomorrow on "squawk box," counting down to the fiscal cliff. three guest hosts who know wall street and washington very well. "squawk box" rise above starting at 6:00 eastern. cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank, like no-fee atms, all over the world. free checkwriting and mobile deposits. now depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account. open a fidelity cash management account today and discover another reason serious investors are choosing fidelity.

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facebook almost back at 25. upgraded to outperform from market perform at bernstein. target increased to $33 from 23. we found a base of 20. fluctuated around 20. now back to 25. >> we'll get the last word from steve but also becky quick can join in on this. you had a column recently and have been battling it out on the internet lately. the word is krugman. what say you? >> i think his ideas are way further to the left than anything i can imagine myself being in favor of. secondly, my one problem with him is that if you criticize an idea of his, he attacks you

personally. i don't think any of this stuff should be personal. it should be about ideas. >> what did you get in battle over? >> whether debt matters. one was whether debt matters. i think he implied that we don't need to worry about the national debt. i think that's obviously -- >> implied? >> i obviously don't think that's the right approach. >> ever since you saw the spanish economists undress him in europe and he basically said that the problem is if someone win as nobel prize, they think this other stuff they say somehow has voracity all of a sudden. specific thing he won the nobel prize for. back in the early '80s about something that has nothing to do with -- basically he had been a political hack for the past 20 years. >> in fairness, he's a very distinguished economist. he has a set of views. he has an incredible following behind those views. >> he's almost too far to the far left. >> he's certainly within that